Bitcoin Shop announced today that some of its management team would waive the majority of their salaries for the next six months, and that all the company's officers had volunteered to cancel their employment contracts.

Bitcoin Shop's chief executive Charles Allen described the efforts as part of a broader attempt to reduce the company's fixed costs while protecting existing shareholders from dilution, because the company would not have to issue new shares at "deeply depressed" prices as compensation to executives. Allen added that he is also foregoing his salary as part of the temporary measures.

"Actions like this illustrate the dedication of our team to build and launch our new platform without further shareholder dilution," Allen said in a press release.

Bitcoin Shop, which is publicly traded on the OTCQB market, is an e-commerce platform that sells everything from Bowflex workout stations to ASUS laptops, with all prices quoted in bitcoin. The firm is one of the few publicly traded companies with direct exposure to the bitcoin economy.

The firm's stock price has fallen in recent months, slipping from a high of $5.26 on 6th February, when Bitcoin Shop completed its reverse merger with OTCQB-quoted firm TouchIT Technologies, to $0.08 when the market closed yesterday.

As a result, the company's finances have required extraordinary actions such as those currently being taken. Bitcoin Shop management's move to forgo its salary means it will save $575,250 a year in salaries and associated costs, the company said in its release.

The company will release some members of management from lockup agreements, which would allow them to sell equity held in Bitcoin Shop immediately. At the same time, Bitcoin Shop plans to set up a 10B5-1 scheme for employees to sell equity through a broker in an 'arm's length' relationship.

Allen explained:

Bitcoin Shop has granted 6.2 million employee stock options, with a strike price of $0.50, according to its latest filing with the Securities and Exchange Commission. The filing shows that the options would have vested over a three year period.

Allen says Bitcoin Shop has spent the last six months developing a platform that would incorporate a wallet and a way for users to buy bitcoins easily. He says the firm is moving away from its current e-commerce model because it's not a "long-term business". The firm invested $150,000 in digital currency-buying service expresscoin on 14th July.

The new platform would integrate features of expresscoin and payment platform GoCoin, which it also invested in in March, Allen said.

"We're trying to wrap the components together [...] We've spent a lot of time developing it and the market hasn't given us credit for it yet," he said.

Allen also addressed the unusual move of allowing its management team to work without employment contracts, calling it his "philosophy" towards management. He said no managers have quit the company, despite not having employment contracts. He added that he plans to recruit new talent to Bitcoin Shop without giving them employment contracts, and that senior management should "lead by example".

In Allen's view, employment contracts benefit the employee, but not the company. He also noted:

New York University finance professor David Yermack said Bitcoin Shop's latest moves were "certainly not normal", when asked by CoinDesk to interpret the firm's actions.

Yermack specialises in the study of executive compensation and company performance. He explained that this kind of business behavior can indicate deeper problems, adding:

Bitcoin Shop had $722,215 in cash as of its last reporting period, which ended on 30th June. Together with its digital currency holdings, the company holds $1.1m in current assets. It reported current liabilities of $216,426, giving it a working capital buffer of roughly $880,000.

Allen denied that his firm was financially distressed, reiterating that the latest management moves were simply a way of reducing fixed costs and protecting shareholders from share dilution.

"We're in this for the long run. We really want to build a phenomenal company," he said.